Minnesota Chapter of Associated Builders and Contractors v. Blissenbach

Background

Minnesota Chapter of Associated Builders and Contractors, Inc. (MNABC), Builders Association of Minnesota (BAM), and J & M Consulting, LLC (JMC) sued Nicole Blissenbach, in her official capacity as Commissioner of the Minnesota Department of Labor, and Keith Ellison, in his official capacity as Attorney General of Minnesota. The plaintiffs sought to block enforcement of Minnesota Statutes § 181.723.

The statute replaced a nine-part test for classifying construction workers as independent contractors with a fourteen-part test. The amended test was scheduled to take effect on March 1, 2025. The statute also added discretionary civil penalties, including possible fines of up to $10,000 for each violation and $1,000 for each day of delay, obstruction, or failure to cooperate with an investigation. The Department of Labor and Industry and the Attorney General have enforcement authority, and the statute provides administrative procedures for contesting certain Department orders.

MNABC and BAM asserted associational standing based on JMC’s alleged standing. The opinion states that MNABC and BAM did not allege that they themselves were subject to the statute or would be harmed by it.

Claims and requested relief

The plaintiffs alleged that the statute was unconstitutionally vague, both facially and as applied; violated the Eighth Amendment’s Excessive Fines Clause; was preempted by the National Labor Relations Act under Garmon and Machinist preemption; and violated procedural due process. They moved for a temporary restraining order and a preliminary injunction.

The court applied the four Dataphase factors: likelihood of success on the merits, likely irreparable harm without an injunction, the balance of harms, and the public interest. Because the plaintiffs sought to block a duly enacted state statute, the court applied a more rigorous standard for likelihood of success.

Likelihood of success

The court first determined that it would evaluate the statute as imposing only civil penalties. The statute expressly described the penalties as civil, allowed administrative appeals, and did not on its face suggest criminal penalties. The plaintiffs had not provided the required clear proof that the statutory scheme was criminal in purpose or effect.

On the vagueness claim, the court treated the challenge as facial because the plaintiffs had not alleged specific facts distinguishing it from a broad challenge. The court held that the statute, considered as a whole, sufficiently described the fourteen-part classification test. It rejected the plaintiffs’ arguments concerning terms such as “invoice” and “main expenses and costs,” noting the ordinary meaning of “invoice,” guidance from the Department of Labor and Industry, and Minnesota appellate authority concerning “main expenses.” The court concluded that the plaintiffs had not shown a likelihood of success on Count I.

On the Excessive Fines claim, the court identified several problems with the challenge. The penalties were civil and discretionary, no fines had yet been imposed, and the amounts would be tailored to the specific conduct. The court concluded that the plaintiffs had not shown that the Excessive Fines Clause applied, that a pre-enforcement challenge was appropriate, or that any fines would be grossly disproportionate. The plaintiffs therefore had not shown a likelihood of success on Count II.

On preemption, the court rejected the plaintiffs’ Garmon argument that the statute’s reporting requirements conflicted with or arguably conflicted with the National Labor Relations Act. The court also rejected the Machinist argument that Congress left independent-contractor classification to market forces. The court concluded that the plaintiffs had not shown a likelihood of success on Count III.

On procedural due process, the court found the allegations largely conclusory. It explained that standard criminal-process protections would apply before any deprivation of liberty interests and that property deprivations could be challenged through administrative procedures. The court also rejected the argument that the statute’s inclusion in an omnibus bill created a federal procedural due process claim based on Minnesota’s single-subject requirement. The plaintiffs had not shown a likelihood of success on Count IV.

Irreparable harm

The plaintiffs alleged economic harm because members would either have to treat workers as employees and bear related costs or risk fines. The court held that economic harm alone rarely establishes irreparable harm. It found that the statute did not require any member’s business to close, that the plaintiffs offered no evidence that closure would occur, and that the Department of Labor and Industry had discretion over whether to impose fines and what amount to impose. The plaintiffs therefore had not shown likely irreparable harm.

Balance of harms and public interest

Because Minnesota opposed the requested injunction, the court considered the balance of harms and public interest together. It concluded that the members were unlikely to suffer irreparable harm and that Minnesota had a strong interest in enforcing the statute. The court stated that an injunction could perpetuate inequities the legislature likely sought to address, including the alleged misclassification of construction workers as independent contractors. These factors also weighed against an injunction.

Disposition

The court held that all four Dataphase factors favored the State and denied Plaintiffs’ Motion for a Temporary Restraining Order and a Preliminary Injunction [Docket No. 8]. The order did not decide the ultimate merits of the plaintiffs’ underlying claims.